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Agricultural News


Strength in the Cattle Market May Have Some Staying Power

Wed, 28 Apr 2010 6:39:27 CDT

Strength in the Cattle Market May Have Some Staying Power


Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel says that supplies of cattle are tight right now- and with beef demand showing signs of revival- cash cattle prices have jumped up- all the way to a dollar per pound a few weeks ago- before easing back over the last couple of weeks. Still, with cattle prices ranging from $98 to $99 per hundredweight, feedlots are seeing closeouts in the black, with profits of around $100 per head not uncommon.


Packers are also making money- and it looks like this strength may stick around for awhile. The big unknown is how consumers will respond as retail prices start to rise. The improvement in beef demand is a fragile thing- and if consumers shy away from beef, that could back this market up quickly. Dr. Peel believes we will get a good reading on beef demand as the pipeline prepares to move beef into position for the Memorial Day holiday.


Peel, in commentary that he released in recent days adds that "Feedlot placements have relatively little to do with current fed cattle markets (which are strong for other reasons) but lots to do with fed cattle markets in the future. Not only was the level of placements lower than expected but most of the increase was in light weight feeders that will finish in September and October. This should moderate some of the concerns about summer market pressure. Obviously we are still assessing beef demand recovery but it appears that supply fundamentals have a lot of momentum going forward. Having said that, there will likely be some relative increase in placements April and May with cattle coming off of grazeout wheat. If it has any impacts it will be in short term timing of marketings in the fourth quarter but it does not change the fact that total feeder supplies are and will remain very tight."



We discuss these things with Derrell Peel on today's Beef Buzz.


The Beef Buzz is a regular feature heard on radio stations around the state on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the listen bar below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.



   
   


Ron Hays Beef Buzzes with Dr. Derrell Peel of OSU.
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